Tax Imposed on "Pacquiao Contract" entered With the Highway District Engineer

November 8, 1960 BIR RULING NO. 488-60 Mr. Raymundo Toribio Laoag, Ilocos Norte S i r: In reply to your letter dated September 27, 1960, requesting information whether or not the "Pacquiao Contract" entered by you with the Highway District Engineer is subject to tax, I have the honor to inform you as follows: Contracts denominated as "Pacquiao Contract" is a contract for a piece of work whereby a person binds himself to execute a piece of work, in consideration of certain price or compensation and the circumstance that the person employed undertakes to perform the stipulated work as a whole for a specific sum is an indication of an independent contractor. (Rafael Gerona vs. CIR, CTA Case No. 203) As a "pacquiao" contractor is an independent contractor, and since the contracts are generally for building roads and bridges, then it is within the purview of the words "road . . . and other construction work contractors, as used in Section 191 of the Tax Code, as amended by R.A. 2072. Accordingly, as an independent contractor, you are subject to the 3% contractor's tax as prescribed in Section 191 of the Tax Code, as amended by R.A. No. 2072. aisadc Very truly yours, MELECIO R. DOMINGO Commissioner of Internal Revenue